Cole Taylor Hires Two Advisers on Whether to Sell

O'Neill & Partners LP to evaluate its future. The Wheeling, Ill., company announced late last month that it had retained two investment banks to explore alternatives, including merger or sale, but did not name them. Hiring more than one firm is a bit unusual, said analyst Robert C. Ollech of Howe Barnes Investments, Chicago. "In this case, I think it's logical to conclude that one was chosen by the Coles and one by the Taylors," he said, referring to the company's two founding families, who earlier last month publicly disagreed over the $1.2 billion-asset company's future. Now Cole Taylor, which owns Cole Taylor Bank and Cole Taylor Finance Co., a subprime-credit automobile finance company, has three main options, analysts said: maintain the status quo, spin off the fast-growing financing company, or sell everything. "I can't see them getting much of a premium selling all of the bank together," said Chicago analyst Joan Goodman of the Pershing division of Donaldson Lufkin & Jenrette. Ms. Goodman recently upped her 1995 and 1996 earnings estimates for Cole Taylor by 5 cents and 10 cents respectively, based on the company's 38% increase in quarterly earnings. However, "it seems to me that since they retained an investment banker they want to do something," she said. Mr. Ollech agreed that selling Cole Taylor Finance to shareholders could boost the financing company's value, as well as Cole Taylor's, if it kept significant ownership. Cole Taylor Finance is on track to comprise nearly 50% of the holding company's earnings in 1996, up from about 35% this year, he said. Before Cole Taylor switched gears and retained investment bankers, director Lori Cole, daughter of co-founder Irwin Cole, had pushed for exploring all options, including selling, to maximize shareholder value. Management, led by chairman and chief executive Jeffrey W. Taylor, son of co-founder Sidney Taylor, said it would continue its existing business strategies, which had brought a 67% return to investors since the company went public in May 1994.